Hopefully, everyone managed to have a great Memorial Day yesterday filled with a little bit of the normal we are all looking forward to returning.
Looking at the Intraday Chart, the formation appears to remain solidly within a second Wyckoff Redistribution. After the Selling Climax (SC) at $8,640 established the floor of the Redistribution trade range, the Automatic Reaction (AR) turned north to $8,860 and established a prelim upper end of the trade range for this Redistribution phase. The formation turned downward again and performed a successful Secondary Test (ST) of lower end of the trade range at $8,680 before turning north again to signal a double top (a bullish signal in Point and Figure) at $8,860. The formation continued to push past the double top to signal a buy at $8,880 and confirm the buy signal at $8,900 before pushing higher and stalling out at $8,960 to establish the upper end of the new trade range at. The lower end of the new trade range would be the prior high at $8,860.
Given we are in a Wyckoff Distribution phase which has yet to retest the lower end of the 1D (higher time frame) trade range, and the 4H Intraday trade range just exited a recent Redistribution phase, this confirmation to buy signaled at $8,900 would appear to be a false buy signal.
Immediately after establishing the upper end of the new trade range at $8,960, the formation turned lower and broke through the lower end of the new trade range at $8,860, as the PA pushed down to $8,840 in a failed test of the trade range. The formation turned higher again, and pushed past the upper end of the trade range at $8,960 forming a double top (a bullish signal in Point and Figure), signaled a buy at $$8,980 and confirmed the buy signal at $9,000 on a perceived Sign of Strength (SOS). Again, the PA stalled after the buy signal was confirmed, the formation turned lower again, and broke through the lower end of the trade range a second time. It formed a double bottom at $8,840 (a bearish signal in Point and Figure), signaled a sell at $8,820, and confirmed the sell signal at $8,800. Given back to back Signs of Weakness (SOS), I would expect the high of $9,000 is an Upward Thrust After Distribution (UTAD) rather than a Sign of Strength (SOS).
Currently, the formation has only $360 of cause built in from the consolidation in this second Redistribution range, which is insufficient to establish a decisive move in either direction. My expectation is this redistribution should play out in a similar manner as the prior Redistribution consolidation range, with almost as many candles in the horizontal congestion count before a move downward. The first Redistribution level had a horizontal count of 14 candles before sufficient cause was built up for a move down. The current Redistribution level has 6, so I would imagine we may remain here for another day or two before the next move.
Looking at the 1D chart, after the PA flipped to a green candle, it pushed higher before stalling out at $9,000. The current price of BTC is $8,843 as of this writing and, unless the daily closes out above $8,840 (preventing a reversal), the formation will print a lower high on the 1D.
My expectation is for the formation to print a lower high over the next few days. The formation still has a ton of room to run (up to $9,280) and can still print a lower high, although I see it as very unlikely while the PA is so strictly confined on the Intraday and signaling Signs of Weakness (SOW).